Wednesday, December 1, 2010

Smashwords Puts Authors and Publishers in Control of Pricing

Our authors and publishers spoke (and some wrote, screamed, begged and politely asked), and we listened.

Effective today, all Smashwords retailers are pricing Smashwords books at the price set by the author or publisher. No more discounting.

It also means we have significantly increased the royalties we pay our authors and publishers.

To summarize how we got here, and what it means to Smashwords authors, publishers and readers, let's take a stroll down memory lane to review how books have traditionally been priced, distributed and sold.

For most of the last several decades, the book industry worked under a wholesale pricing model. A publisher would ship their books to a distributor or wholesaler, who would then sell the books to brick and mortar bookstores. In advance, the publishers and their supply chain partners would work out a discount schedule in which the retailer would purchase the book for some percentage off of the suggested retail price.

For example, a retail bookstore might purchase books from the wholesaler/distributor for 50% off of list price, which means the retailer would pay $15 for each $30 list price book they sell. The retailer could then set the price. Most retailers, taking advantage of their close proximity to the customer and their understanding of consumer behavior, had the ability to discount the book to such a price that they could achieve their objective.

For example, if a retailer's objective was to maximize the per-copy profit, they might sell the book at list price (when I was Brazil in October, I learned some airport bookstores sell print books for more than the list price). If the retailer wanted to maximize their overall profits, they might sell the book at a discount and make up the difference in increased volume. If a retailer wanted to attract buyers into their store, they might even sell the book at below cost.

To the author and the publisher, the discounting didn't make a difference, because the author and publisher were paid a fixed percentage of the suggested list price. Retailers liked this pricing model because it gave them the flexibility and freedom to use price to help serve their customers and serve their bottom line. Everyone was happy.

Then ebooks came on the scene, and the pricing of ebooks followed the same general wholesale model, only rather than shipping physical copies of a dead-tree book to a warehouse or distributor, the publishers or their distributors would ship a single digital copy of the book to the retailer, and the retailer would make digital copies each time they sold one.

Retailers, responding to customers who expected to pay less for ebooks than print books, started aggressively discounting. Many publishers dreaded such discounting for fear it would devalue books, or would cannibalize print book sales. Then Amazon, in an effort to serve their customers, started selling many best-seller ebooks for under $9.99 - for less than what Amazon had to pay the publisher for the book.

An ebook price war broke out, and other ebook retailers tried to match Amazon's price.

Now remember, in the print world, publishers didn't care too much if a retailer discounted the book, since the publisher is paid based on a predetermined discount off of list. Publishers also understood that if the retailers couldn't sell through their inventory of books, those books would be returned to the publisher for a full refund. So the discounting double-benefited the publishers.

You might think the publishers would have been happy that Amazon and other retailers were pricing books at below cost. The low costs drove up demand, helped accelerate the growth of the ebook market, and helped the publishers sell more books.

But no, the big New York publishers were not pleased. They feared that Amazon and other retailers, by pricing their books under $10.00, were devaluing books and setting an inappropriate customer expectation that ebooks should be priced at $9.99 or less. Publishers feared Amazon was exerting too much control over prices, and further feared that some day Amazon would come back to publishers and demand greater discounts, thereby permanently lowering the publisher's list prices and profits.

When Apple came on the scene in April 2010 with a new pricing model known as "agency," one in which the publisher set the price and Apple, acting as a sales agent, would not discount, five of the big six New York publishers jumped for glee. Finally, they thought, Apple would be their savior - their counterbalance - to Amazon's increasing influence in the ebook business. Publishers also appreciated that Apple would pay them 70% of the list price, as opposed to the traditional 50% or less that they earned under the conventional wholesale pricing model.

So the five big New York Publishers - now known as the Agency Five or A5 - put a gun to the heads of all the major ebook retailers, and basically told them, "you need to either switch us to the agency model April 1 or we're going to stop allowing you to sell our books." As you might imagine, the retailers were not pleased. First, no one appreciates threats, especially from suppliers who are supposed to be your partners. And second, if you take away a retailer's ability to control the price, you make it difficult for retailers to do what they do best, which is to use price as a tool to sell more product and make customers happy.

Amid this awkward shift to agency for the A5, the A5 also gave second shrift to the smaller independent ebook retailers, even though a thriving ecosystem of indie ebook retailers would assist the A5's master plan of creating a counterbalance to Amazon. Due to logistical problems, contractual holdups, tax collection requirements and prioritization, the small indie ebook retailers were not allowed to switch immediately to agency, which meant that the indie retailers lost access to most of the best-selling books in April. I'm told more than one indie retailer went out of business after the virtual rug was pulled out from underneath them when they could no longer sell these books.

The move to agency also created conflict within the supply chain, and it created challenges for Smashwords authors too. Prior to the advent of agency, three our original retailers - Barnes & Noble, Sony and Kobo - were under the traditional wholesale retailer model. Previously, most Smashwords authors and publishers didn't care that their books were discounted, because the discounting only helped sell more ebooks, which benefited authors, publishers and readers.

But then around July, Amazon increased their royalty rates for direct publishers to match the Apple 70%. For the authors who chose to work directly with Amazon, they had to agree that their books would not be sold elsewhere for less, and if Amazon discovered the book priced elsewhere for less, they had the right to discount the author's book to price-match the competition.

This is when the proverbial fertilizer hit the fan for some Smashwords authors who publish direct with Amazon via DTP and then use Smashwords for all the non-Amazon retailers. I recall receiving one especially frantic email from a Smashwords author on disability retirement who was faced with the prospect of seeing his Amazon sales slashed due to discounting at our retailers. This author, like some other panicked authors who had been selling at Amazon for a long time, decided to remove their books from Smashwords retailers. This, to me, was an especially disconcerting trend, because these authors were hurting themselves by removing their books from important retailers like B&N, Sony and Kobo. Some of these authors even removed their books from our Apple channel, or unpublished their books at Smashwords altogether, even though Smashwords and Apple have never discounted. When someone yells "FIRE," it's tough to think straight. Matters weren't helped when some authors, clearly talented on the imagination front but lacking hard details, jumped to erroneous conclusions in online message boards, which further fueled more panicked responses.

When an author pulls a book from retail, it destroys their sales rank, they lose all their reviews, and they deny themselves the opportunity to reach new readers. In other words, no author in their right mind should ever remove a book from retail.

On the other hand, it's difficult to maintain your right mind when your friends are panicking too, and you're suffering real measurable harm when an auto-pricing robot cuts the price of your book at the largest retailer - a retailer said to control 70% or more of the ebook market. Remember, Amazon had every right to do these price corrections - and the authors agreed to this when they signed the Amazon contract - though it did create a situation where some authors felt forced to take actions to preserve their sales at Amazon. Some of these authors eventually waded back in, or tried to compensate for the expected discounting by raising prices at Smashwords, or raising prices across the board.

The obvious solution to me, given the impossibility of managing two incompatible pricing models, was to give our authors and publishers complete control over the price of their books. We've always done this for sales at Smashwords.com, our small retail operation, but I knew it would be a bigger challenge to move our retailers to the agency model, or something agency-like. Needless to say, none of our retailers were too keen to do this when I first started requesting this in June. I can't blame them for their hesitation, because the agency model creates all kinds of complexity and expense for the retailer to administer. I imagine many were still smarting from the insult of being forced to do it in the first place by the A5.

Today, however, I'm pleased to report that Kobo, Barnes & Noble and Sony have transitioned all Smashwords books to the new model. I'm also pleased to report that unlike the tactics used by the Agency 5, we did not put a gun to the head of our retailers. No shots fired, no threats made. In the end, I think each retail partner decided on their own that what is best for Smashwords authors and publishers is also what's best for them and their customers in the long term.

Possibly I have a different view of our retailers than the view from the large publishers. I see our retailers as true partners. Our mission at Smashwords is to help our authors and publishers connect with readers. One of ways we accomplish this is by supporting our retail partners because they more than anyone know how to connect readers with books.

Every once in a while I'll see people suggest authors should only sell their ebooks direct on their own websites, as if all intermediaries between the author and the reader are to be excised. Those folks are smoking opium. Smart authors put their books at retailers who can put their books in front of customers.

So effective immediately, all our retailers are on the same page. Like with our other agency retailers Apple and Diesel, we now pay our authors and publishers 60% of the author/publisher-determined list price for books sold at Kobo, Barnes & Noble and Sony. Simple.

This change means that for sales at B&N and Sony, we have significantly increased our royalty rates. Previously, we paid 42.5% of your suggested list price. The new 60% represents a 42% increase (42.5*1.42=60). At Kobo, we've increased our rate from 46.75% list to 60% list for most sales, a 28% increase. At Kobo, the new royalty rate applies for books priced between $.99 and $12.99, and only for dollar-denominated sales. We can no longer ship books to B&N that carry the price "Reader Sets the Price," so if you're one of the very few authors with this price setting, and you want distribution to B&N, then please change your price asap to $.99 or higher. All three have the freedom to price match if the same book is sold elsewhere for less. Make sure your prices at Smashwords are the same as elsewhere. Click to your Smashwords Dashboard's Channel Manager for summarized details.

With this change comes new responsibility for authors and publishers to price their books at a level customers want to pay. Here, I think indie authors and small publishers do a much better job than the big publishers. Already, the average book at Smashwords is priced under $5.00. At $5.00, a Smashwords author earns $3.00 profit for every book sold at retail. Large publishers can't compete against that (a traditional mass market paperback sold for $8.00 earns the author about 40 cents), which is one of the reasons I firmly believe the future of publishing lies in the hands of indie authors and small publishers, and in the years ahead we'll see more and more big-name authors go indie. They can earn more money per sale while serving their readers with a lower cost product. It's a win-win for the author and reader.

If you'd like to learn more about the agency model, Mike Shatzkin did a good post on it a few days ago at his Idealogical blog in which he concluded agency pricing represents the most significant event in 2010 for the publishing industry. Click here to access it.

If you'd like to learn about the transition to agency from the perspective of an indie ebook retailer, Kelley Allen over at Diesel has been posting a fascinating blow by blow as the events unfolded from April through today. She thinks the agency model will eventually be good for indie retailers and customers in the long term, though the path to here was fraught with much pain. Some links from the Diesel blog:

45 comments:

My only concern with the way publishing is going is how anyone will earn big money ever again. Stephen King could go indie right now and probably do fine, but I'll bet he'd take a hit and I'll bet his accountant has already told him that, so...he's waiting. The biggest issue, and one no one can accurately address, is how one can create a national brand when one is on his or her own. Indeed, instead of the Internet making it cheaper and easier to advertise your product, it's made it harder and more expensive because EVERYONE is doing it and it takes an unknown amount of cash to make the proverbial big splash. One author might spend a few thousand, while another might have to spend tens of thousands. Can you put a finite number on that? I would say no, you can't. And that is the scary thing. For authors looking to become full-time writers, that era may very well be over for all of us.

Great news -- thanks for all your help on this issue, Mark. I'm glad to see that the pricing issues have been solved, and we finally have a simple way to ensure our prices are the same through all venues and we're in compliance with each vendor's terms. The fact that it comes with a sizable royalty bump is certainly a nice bonus as well!

Thanks Mark and Smashwords people for working out these distribution deals. It has been dismaying the past months watching retailers fight for market share by deeply discouting products that most of us have already priced at a fair and low price. Suppliers (writers & publishers) need to have some reasonable expectation of what their goods are going to earn them when they move them through wholesale channels. You can't develop a business based on a percentage of a price you don't have control over.

I had always priced my ebooks below a mass market paperback price, so I feel my recommended retail certainly gives the retailers a fair price to market to consumers.

Mark, this is about the most cogent explanation of the wholesale vs. agency models I've ever seen. Congratulations, and thank you.

Interesting question. At Amazon DTP, they'll only pay 35% royalties for titles under $2.99, whereas they're willing to pay 70% for higher-priced titles. Once Smashwords is distributing through Amazon, it would seem slightly more profitable to sell the lower-priced works on Amazon through Smashwords (60% royalties) and the higher-priced ones directly through DTP (70% royalties). Or am I missing something?

At any rate, I'm very grateful for the hard work you and your staff have put in on all our behalfs.

This is the big problem that's worried me, too. We're swimming in a much bigger river with many more fish, and getting noticed will be a much bigger problem.

One thing that may save us is that, with the higher ratio of royalty-per-sale, we can make do with fewer sales to earn the same amount. Whether that will ultimately be enough of a difference is anyone's guess.

@ BillWalker - I have a contrary view of this. I think the opportunities for authors to strike it big are bigger now than ever before. The traditional gatekeepers are falling away, and now it all comes down to the ability of your book to resonate with readers. In the old world of print books, authors lucky enough to get published were only given a few weeks to sell through on book shelves before retailers took the books down, boxed 'em up, and shipped them back to the publisher for a full refund. When you eliminate availability and discoverability, you suck the oxygen away from a book's potential. In other words, the author's potential was wasted before they were given a fair shot to find their audience. The physical print world requires that books go out of print before their time. It's a shame. Ebooks are different. They're immortal. Shelf space is unlimited. As I look at the highest earners on Smashwords, most were not overnight successes. Each quarter, their numbers are building higher and higher. It's because their books are resonating with readers, spreading via word of mouth, and they're building sales rank over time at our retailers. Shayne Parkinson is one example. Who would have known there was an international market for historical fiction set in New Zealand? The publisher in NZ who rejected her didn't know. But readers know, and her sales are growing each quarter. J.A. Konrath, who's also on this thread, is another example. He's only going to get bigger in the years ahead. It doesn't happen overnight. It's all about your book and the reader, and your next book.

@Kait - Correct. Books distributed to B&N by Smashwords don't have that same restriction. $.99 and above will get you 60% at B&N, Apple, Kobo and Sony.

@Maria - I didn't buy it, but I was fascinated by it. Because it was a best-seller, and because the bookseller was the only source of this book at the airport, they were able to charge a premium. Oh, and I don't read Portuguese. :) It's an example of the scarcity tactics big NY publishers have always played. These scarcity tactics are a bit more challenging to pull off in the ebook world.

@Stephen - I think you're reading too much into it. Kudos for the creative royalty arbitrage, though I wouldn't hold my breath.

This is terrific stuff, and worth its weight in gold. (Actually, if you want to be picky, it must be worth more than its weight in gold, because a digital post on a blog weighs... OK, you get the point.)

I know you are a businessman, in the business for profit, and the steps taken are in your interests, but even so I think all indie authors owe you a considerable debt here.

I haven't yet done a book on Smashwords, but I am certainly planning to.

Hi Mark, Wow - I continue to be very impressed with you and your team's work - Way To Go!

I have a question - and I know I am going to sound really dumb for this - but maybe someone can help me. If the big publishers are pushing the agency model where they set the price and the store respects that, then why are most books stil discounted at those same retailers? For example, on the Sony store, Larsson's books show a digital list price, and a highly discounted 'our' price. Same goes for Kobo & B&N. (I checked other titles as well).

My concern is that if I set a price that is now not being discounted, my books are being compared to these other books which are - and customers like to feel like they're getting a deal, even if my book is list-priced low and fairly (e.g. our new releases are $3.99 and $4.99).

Let me end by saying that you explained the two models so well - thank you so much for that. That said, I might need some more dumbing down! If anyone can offer some more advice, I'd truly appreciate it.

My personal feeling (YMMV) is that you should post your price at what you think is fair, regardless of what other people do. Yes, those readers who consider price alone will gravitate to cheaper books. It's also a trait of human nature that people don't always respect what they get too cheaply. Have some self-respect for your own work.

On Mystery Science Theater 3000,one of the creators worried that there were so many jokes that some people wouldn't get them all. To which someone else replied, "The right people will get them!"

@Michael, yes, good point. We're running a business here. As such, I believe the best way for us to build a large and profitable long term business is to make publishing as profitable as possible for our authors and publishers. Although this is a business, and we want to make it large and profitable, there's a higher social purpose that drives us, just has there was a higher social purpose that drove my last startup, BestCalls.com. I learned a lot of lessons there that I've taken to Smashwords. :)

@Michelle - It's not a dumb question at all. Not all publishers are on the agency bandwagon, and because agency is so difficult for retailers to implement, retailers offer it to very few suppliers. Although the vast majority of Smashwords authors and publishers are thrilled with the news, not all are happy. As I mentioned in the post, some authors and publishers do derive benefit from discounting. I heard from one Smashwords author who had his book priced at $.99, and Kobo previously discounted it to $.89. This caused Amazon to discount the book to $.89, which caused his book to sell really well at Amazon. He said the moment Kobo stopped discounting (about two weeks ago), Amazon moved him back to $.99 and his sales dropped precipitously. Agency pricing is a double-edged sword. Net net, I think it cuts to the benefit of the indie author or small publisher who's already offering their books at a lower price. Time will tell.

I dont worry about royalties and the like for now because even if I did get some change for each of the six hundred some odd books I've moved of The Shadowbelt it still wouldn't add up to REAL money. I just give mine away for now that way I reach a broader market which is important for a new author. Fortunately, my downloads are still doing well as some of my friends have national rock bands and they help promote my free ebooks in their music videos. Sweet!It does anger me to see distributors being greedy but it's nice to see Mark is working on that for all of us so when we get to the point where royalty rates really SERIOUSLY matter, we are ready. = my two cents

Bill, yes, for the vast majority of authors, it'll be tougher to get a traditional contract, and advances will decline. I've heard of well-respected large publishers offering $1,000 advances for print and digital rights. As ebooks rise as a percentage of overall book sales, such small advances will be scoffed at by indie authors who now have the ability to publish direct to their readers. I don't think big advances are gone forever, but i do think they're more likely to go to celebrity authors and authors with large established platforms. I see Christine O'Donnell and Snooki have book deals. That's got to be depressing to professional authors who've spent a lifetime honing their craft, though it also provides a hint of the direction of traditional publishing. Authors have choices now they didn't have before. :)

Mark: More choices, yes, but what if one's dream is to have a career on a major level. Has anyone figured out how much an indie author would have to spend to promote himself or herself to that degree? I'll bet it would be a staggering amount and is unfortunately why the Snooki's of the world are getting the big book deals. No one wants to spend that kind of money on an unproven talent, even if they're great. And the average indie author won't have the wherewithal to do it.

You can get a big advance as a new author, too - it's called having a book that's "high concept" and they think is going to be the next Twilight, etc. I know an author that sold her book for 6 figures, the first she's ever getting published, and world rights have been selling like hotcakes. It'll probably be out before 2011 is over, that's how badly they want her book out and think it's going to be a smash.

You can't write to try to target a big advance - it's too intangible - but they do happen for people besides celebs. There's big pressure with a big advance, though...everyone wants it to pay out.

This is such an informative post, Mark - thanks so much for explaining all of this so thoroughly!

As an aside, I wanted to add that internationally, I think charging more than list price is common. I lived in Mexico for several years before e-books were on the scene and we paid up to twice list price for books in English in Mexico. There were precious few stores that had any selection in English and of course the stores realized that the only alternative was to purchase online from the U.S. and have it shipped, which was outrageously expensive. So, every time we were back in the states, we brought our big suitcases and brought them back to Mexico filled with books ;-) If only I could've had an e-reader back then ...!

I never write with the idea of pandering to anything. But publishing's "Blockbuster" mentality is a major reason they're in the toilet. Instead of building a steady stable of authors with a dependable backlist, they're constantly chasing the brass ring. My book, "A Note from an Old Acquaintance" was written with passion and dedication to the idea of telling the best story I could. Do I wish my agent could have sold it for big money? Sure do. But the economy was tanking and those brass rings were being chased with even more fervor. Too bad for me, and others of my ilk.

Several Smashwords authors are already headed toward major level, and they're doing it without big budget marketing or Snooki-level celebrity. I'm looking at one author now who earned under $10 in his first pay period at Smashwords in early 2009. I can point to plenty of *former* Smashwords authors who when they saw their first payment at this level, or even higher, got mad and unpublished everything. Not this author. Quarter by quarter, his sales inched up, first to the 100s of dollars, then thousands. Then he broke out at one retailer, and now he's starting to break out at another. He'll earn over $20,000 in the next pay period. Several others are on similar upward trajectories. They're writing books that resonate. That's more important than marketing spend. Successful authors of the future will build their platforms on the strength of books readers enjoy reading. This speaks to the promise of potential for every indie author. You'll be judged by readers on the quality of your book. Sure, a guest spot on Oprah or Good Morning America can help make an author an overnight success, but the good news is that there are now other ways to get there if you're patient and persevere. :)

PJ, thanks for that international perspective.

Jessica, coupons represent a private transaction between you and your reader, and as such, they don't impact your list price or your price at retailers.

Mark: That's great that it's happening for some of your authors. I'm curious what this person did to get that word of mouth going like that. I would assume, he or she did not simply rest on the laurels of his or her story. I also would welcome talking to you about this in a less public forum. If you wish, you can send me a private e-mail through my web site: www.billwalkernovels.com and we can take it from there. Thanks.

Mark, my belated thanks for all you've done for the indie authors of this world. My own novels might be phenomenally successful; they might be ignored. In either event, they'll be mine, and not the end product of a committee. And maybe they'll be read a hundred years from now.

Until yesterday I had a collection of 'reject' slips. Today I can tell whom I meet to go to Smashwords and download and read my books.If I am asked,'really, are you a published author?'I can push my chest out,"of course, and 'sold' author too!."

This is all thanks to Mark. One day I am sure, appreciations like Booker Prize,etc. will extend and embrace e-Books.It is but inevitable, and a big thanks will go to Mark from all us authors.

Jeff as always, great news and great job. I'm running and pumping a promo for a free coupon download and my novel has been the # 1 or # 2 best seller since last week and holding strong. Once the promo ends I'm dropping the price from 2.99 to 1.99. I hope this has helped drive readers to SW site

As a customer, here's a contrarian question why is selling an ebook at 9,99$ is devaluing them and the authours?

One of the difficulties I have with agency pricing is how would authours and publishers would justify an ebook at say 20$? I have an example in mind even though the book in question isn't under agency pricing but the concern is still valid :In Spain, there's a book I'd like to buy the electronic version. The price of the printed book is 21,50 euros. The ebook is the same price. I'm asking myself how can the publisher justify this price when there's no ink, paper nor logistics? And it's just the electronic version of the printed book?

Electronic books have only 3 issues: a) ensure the integrity of the electronic text (b) ensure the integrity of the DRM (c) ensure that the servers don't crash or corrupt the files.

So as a customer, I think the publishers are being a bit remiss in not explaining to their customers why ebooks will have say 20$ or more price tag)I have no objections per se if the authours and the small publishers benefit but everyone will still need to patiently explain why agency pricing benefits the customers.

Hi Xavier, you're correct, publishers have a difficult time justifying such a high price on an ebook when it's the same as the print price. This is a big criticism of the traditional publishers, who tend to overprice some of their books, though the issue is really separate from the agency pricing model. For some of the big publishers, the agency model, which allows them to earn 70% list rather than 50% or less, has enabled them to lower their suggested list prices and lower prices to custoemrs. In some cases, the prices to customers have increased. As the customer, if you feel a publisher is pricing to high, vote with your wallet and don't buy the book.

At Smashwords, our authors and publishers price the average book at under $5.00, so over-pricing is definitely not a problem here.

Mark, I'm a new indie author, and I am thankful to have found Smashwords. It provides the same distribution as traditional publisher, but it also puts the author in closer conact with the audience they reach. I was recently told that this was a scary time in publishing because of the rise of ebooks; I think that is small-minded, fearful thinking. This is an exciting time in publishing and I'm thrilled to be part of it.

I'm a newbie latecomer to this discussion, so I don't know if it's still alive, but I do have one relevant question RE: listing a book with Smashwords:

Question pertains to E-book returns by E-book customers, i.e., Nook & other E-reader channels propagated by Smashwords when one lists their book with Smashwords. From what I can gather by reading various blogs & even Nook & Kindle website discussions, E-book buyers may ask for & receive refunds for E-books D/L to their readers. I'm looking for the reality of this problem, the number or percentage of refunds experienced by authors who are listed on Smashwords, & the consequent effects these refunds have had on sales, pricing, royalties, reporting, etc. I am currently published with CreateSpace and am also listed on Amazon. I am considering the wisdom of also listing with Kindle and/or Smashwords. If anyone feels qualified to comment based upon their experience with this putative problem, I would appreciate hearing from you on this blogsite.TIA, Cimarron

Cimarron, of all the retailers, Amazon is probably the most lenient in allowing ebook customers to return a book for any reason. Despite their leniency, the rate of return is negligible, inconsequential. Plan on between one in one hundred to one in five hundred. Nothing to worry about, and certainly no reason to limit your distribution to any retailer. To limit returns, make sure you have solid formatting, multiple formats (at least PDF, EPUB, MOBI), an honest book description that doesn't misrepresent the book, and of course a high quality book that is well-edited. At Smashwords.com, our own small retail operation, we don't allow returns except for very special situations, such as poor formatting, unavailability of most important formats, or obvious honest customer errors. Although we're more stringent than Amazon, I think I prefer Amazon's model. It's more customer-friendly. Since I think most customers are trustworthy it means that customer-friendly leads to more book sales which is what we want.